Sustained risk-off sentiment on the Federal Government of Nigeria (FGN) bond remained in the secondary market, despite low yields. The Debt Management Office has maintained control over interest rates on FGN bonds as part of its ongoing efforts to keep Nigerian debt servicing costs under control.
Some market critics perceive this as financial repression, pointing out that inflation (33.15%) outperformed the benchmark interest rate (27.25%) in terms of portfolio returns.
The rate of yield repricing has slowed in the fixed income market, and the market expects disinflation to continue in the remaining part of the year in the absence of a shock.
In the secondary market for the FGN Bond market, there was negative trading activity, resulting in a 0.01% increase in the average yield to 18.74%. Bondholder investor selloff activities were observed at the mid-segment of the curve, particularly in the MAY-33.
Fixed income analysts said yields increased on selected papers, specifically the 2031 and May 2033 FGN bonds. Fixed income market analysts at AIICO Capital Limited said most participants remained pessimistic due to the recent interest rate hike.
However, towards the close of the market, a few buyers resurfaced. As a result, the average mid-yield rose by 6 bps. “We expect a similar play at tomorrow’s session, though coupon inflows should drive some buying interest,” analysts said.
Collaborating the sell side activities, Cordros Capital Limited said in a note that the average yield expanded slightly at the short (+1 bp) end following the selloff of the JAN-2026 (+1 bp) bond but closed flat at the mid and long segments.
